QuarterSpot is best for small businesses in need of short-term working capital loans but without good enough credit to qualify for funding from a bank. The lender provides an alternative both to traditional loans and the merchant cash advances offered by many other “fast cash” companies. However, the high cost of QuarterSpot’s funding makes it impractical for businesses able to take advantage of cheaper options.
QuarterSpot is an online lender offering short-term loans for small businesses seeking alternative funding for working capital. Founded in 2011, the lender’s “goal is to deliver financing with speed and convenience.” A team made up of individuals with experience in the lending industry, business strategy, technology and risk management works with merchants to provide loans of up to $250,000 with flexible terms and predictable payments.
As a “fast cash” lender, QuarterSpot aims to deliver funds in as little as 24 hours from the time a loan offer is accepted. Competitive rates and a focus on business growth put this lender a cut above others in the industry relying on questionable lending practices to close deals. QuarterSpot also emphasizes security, using 128-bit encryption for transactions and housing all customer information in a well-protected data center.
A FICO score of 550 is required to apply for a short-term loan from QuarterSpot, making funding accessible to companies with less-than-perfect credit histories. Unlike applying for a bank loan, where a higher credit score improves the chances of an application being accepted, merchants applying to QuarterSpot need only meet the minimum requirements to gain access to funds. This may allow merchants previously rejected by banks and other traditional lenders to qualify for the money they need to cover expenses, strengthen their companies and invest in growth.
Both customer reviews and QuarterSpot’s website highlight a helpful and dedicated team of lenders with a focus on helping businesses get funding to achieve their goals. Despite listing specific requirements for pre-qualification and approval, the lender is willing to make exceptions to provide funding to merchants in need. Well-established businesses may be able to qualify for and receive more than $250,000 if QuarterSpot feels the level of risk is low enough to extend a special offer.
QuarterSpot provides funding to most of the common industries served by other lenders in its niche. These include retail companies, restaurants, automotive repair and other service-based businesses. “Fast cash” loans are often extended to industries like health and beauty, medical establishments and manufacturing, as well. The lender doesn’t provide a full list of accepted industries on its website, but its marketing language suggests the application process is open to just about any small business meeting basic application requirements.
Several high-risk industries are served by QuarterSpot. These include trucking, construction and law firms, markets some other “fast cash” lenders won’t work with. Real estate businesses are excluded from the industries QuarterSpot will fund.
Companies in ND, RI, SD and VT aren’t currently eligible to apply for loans from this lender.
QuarterSpot offers flexible term rates for businesses in need of leeway in their payment plans. Terms of nine, 12 and 18 months are available, so applicants aren’t saddled with payments and fees stretching over years as may be the case with a traditional bank loan. Although the lender doesn’t specify how terms are calculated, standard industry practice is usually to offer longer terms to merchants with strong financial statuses.
In addition to meeting the minimum FICO score requirement, merchants applying for QuarterSpot funding must:
The person filing the application on behalf of the business must own at least 50 percent of the company and provide QuarterSpot with a personal guarantee. No collateral is required, but the guarantee effectively states the applicant is responsible for paying off the loan in full before the terms are up. If payment isn’t made, QuarterSpot reserves the right to file a UCC lien. The lien may put the business in jeopardy in the event the merchant defaults on the loan, and other lenders often refuse to extend funding to companies with active liens.
Applying for a QuarterSpot loan is done entirely online using a free application form accessed by clicking the “Apply Now” button on any page of the site. Before going through the entire application process, merchants can use a quick three-question prequalification survey to determine if they meet requirements.
Qualifying merchants must provide the following information to apply:
QuarterSpot then requests merchants to link their bank accounts via its secure servers to allow their team to review recent transactions. This provides a picture of the financial health of the business over time instead of just a snapshot of a few months. Merchants also have the option of skipping this step and uploading the required bank statements instead. Supporting documentation, such as a voided business check, the most recent business tax return or a copy of the applicant’s driver’s license, may also be provided.
Upon receiving the necessary paperwork, QuarterSpot’s team puts together an offer with complete details of fees and terms. Funds are deposited in the merchant’s business bank account in as little as one day after the offer has been accepted.
According to QuarterSpot’s website, merchants pay “as little as 12.5 cents” on the dollar in loan fees. Merchant Maverick’s review gives a range of $1.10 to $1.40 for every dollar borrowed, or a range of 1.1 to 1.4 in fixed rates. NerdWallet puts fees between 30 and 70 percent APR with an average of 44 percent, and Fundera reports merchants borrowing from the lender may be changed between 23 and 52 percent.
High rates are common in the short-term online lending industry, so QuarterSpot’s fees qualify as competitive when compared to other companies offering similar loan products. However, even at QuarterSpot’s lowest estimated rate, a merchant qualifying for a $100,000 loan would wind up paying $12,500 in fees. At $1.40 for every dollar, fees on a loan of the same size would amount to $40,000. Combined with high origination fees, the total cost of funding from QuarterSpot may wind up being higher than some merchants can afford.
Loans from QuarterSpot have a fully amortized structure, resulting in predictable daily or weekly payments. Merchants must review loan offers carefully before accepting proposed terms and rates to determine if the required payment structure is reasonable in light of the current financial strength of their business.
Merchants with one existing loan may apply for funding from QuarterSpot. This prevents the potentially serious financial consequences of stacking multiple loans to cover mounting business expenses.
In special situations, QuarterSpot will pay off competitors if a merchant can net as little as 10 percent of the loan. Second-position loans may also be refinanced to ease the burden of payments and help companies get out of debt more quickly.
Applying online for a QuarterSpot loan is free.
Fees for QuarterSpot funding are higher than most other lenders in the industry. The exact amount isn’t given on the company’s website, and other sources offer conflicting information. Merchant Maverick reports fees range from 1 to 4 percent; Fundera puts the amount at 6 to 9 percent. Other sources cite fees between 8 and 12 percent.
High origination fees can take a significant chunk out of the funding for which a merchant applies. At a rate of 12 percent, for example, a $100,000 loan becomes $88,000, and this difference could leave a business unable to cover expenses. Merchants may need to apply for a larger funding amount, meaning more fees and more interest, or look elsewhere to get the money they need if QuarterSpot’s fees make funding prohibitively expensive.
Once a merchant has been a QuarterSpot customer for 90 days, it’s possible to request a renewal. Reviews suggest the renewal process is quick and easy as long as all qualifications are met.
Like many lenders offering fast access to working capital, QuarterSpot doesn’t charge any prepayment penalties. However, the lender sets itself apart by offering full interest forgiveness to customers able to pay back their loans early. This can result in significant savings, which may be calculated using an online tool on QuarterSpot’s website.
What this means for merchants is interest is only paid for the amount of time the funding is being used in contrast to merchant cash advances where all fees must be paid in full regardless of when the total loan amount is paid off. Seasonal businesses experiencing higher sales volumes during busy times may benefit the most from this policy as they become able to put more money toward loans and accelerate the payoff process.
Short-term loans obtained from QuarterSpot are intended to be used only for business purposes. The company doesn’t track exactly how the funds it grants are used, but merchants in the industries to which it lends commonly seek such loans for many common reasons, including:
The speed with which funding can be obtained from QuarterSpot also makes its loans helpful in emergency situations. Business owners finding themselves facing unexpected expenses can get the money necessary to handle the problem instead of scrambling to come up with funds on their own or facing the possibility of filing for bankruptcy.
Short-term loans with the fully amortizing structure offered by QuarterSpot are more stable and predictable than other alternative funding like merchant cash advances and allow businesses to budget for regular payments. When faced with a situation where cash is needed sooner rather than later, a short-term loan could mean the difference between getting stuck in a cycle of increasing debt or coming through a tough time without suffering serious setbacks.
With an A+ BBB rating and only one complaint on the BBB site, QuarterSpot is ahead of many “fast cash” lenders. Merchant Maverick and TrustPilot both rate the company at 4 out of 5 stars. Positive feedback praises the lender for:
Negative reviews cite poor customer service and high rates as reasons to avoid pursing funding from this company.
Neither Facebook nor Google show any reviews for QuarterSpot, which narrows the research options for merchants seeking to compare customer opinions of this company and other lenders. However, full reviews on Merchant Maverick, NerdWallet and Fundera provide additional details regarding fees, the application process and the pros and cons of QuarterSpot’s loan policies.
QuarterSpot has been BBB accredited since October 2014 and has been featured in articles in the Financial Times, the Wall Street Journal and Yahoo! Finance.